§ 2.52 p.m.
§ Lord Orr-EwingMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government how many orders for merchant ships have been won by British Shipbuilders in the financial year 1984–85 and how does this compare with previous years.
9§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, British Shipbuilders have won orders for 22 merchant vessels, totalling 221,000 compensated gross tonnes, compared with 13 merchant vessels totalling 116,000 compensated gross tonnes in 1983–84, and 19 vessels totalling 180,000 compensated gross tonnes in 1982–83.
§ Lord Orr-EwingMy Lords, does not this excellent news arise because of better industrial relations, better working practices, and improved productivity which now places this country ahead of other competitive shipbuilding countries?
§ Lord Lucas of ChilworthMy Lords, I agree with my noble friend in the first part of his supplementary and would merely add that the implementation by British Shipbuilders of their new merchant ship product strategy, backed by the considerations which my noble friend mentioned, has also been a contributing factor. While both Japan and Korea continue to take a very much higher share of the world market, our own efforts have to be doubled and redoubled.
§ Lord ShinwellMy Lords, is the Minister aware that one of the reasons why the shipping companies in Great Britain are not ordering more vessels to be registered under British registration is that for several years now—for far too long—British shipping companies (I regret to have to say this, and am prepared to have what I say challenged) have been selling their ships to foreign countries, to Greece and some countries in the third world, at low prices and in competition with British shipping? As long as that goes on, obviously we cannot expect to build up an effective British maritime situation.
§ Lord Lucas of ChilworthMy Lords, while what the noble Lord, Lord Shinwell, says may be true—and I must say to him that I rather doubt it—I believe that where British ships are sold, whether they are flag in or out, has very little to do with the Question on the Order Paper.
Lord Bruce of DoningtonMy Lords, can the noble Lord give an indication of the percentage of the orders referred to in both the Question and Answer which came from British shipowners during the two years under review? Will he confirm that the competition which British Shipbuilders and shipbuilders throughout Western Europe are encountering from Korea, which pays wages of the order of some 30 per cent. of those paid in Western Europe, still presents a problem which which Her Majesty's Government, in association with the EEC, ought to be dealing?
§ Lord Lucas of ChilworthMy Lords, with regard to the orders referred to in my original Answer—the 22 ships totalling 221,000 compensated gross tonnes—I believe that they are all for United Kingdom operators. United Kingdom shipbuilders took some 2.2 per cent. of world new orders in the first nine months of 1984. With regard to the final part of the noble Lord's supplementary, the question of unfair competition is one that continually engages Her Majesty's Government. We are presently negotiating 10 with the Commission with regard to the areas of assistance which our Government can give to our shipbuilders.
§ Lord Taylor of GryfeMy Lords, would not the Minister agree that in addition to the factors mentioned by the noble Lord, Lord Orr-Ewing, the question of financial arrangements in support of these bids is also important? I congratulate the Government and the banks concerned on the financial packages they put together recently in the placing of some of this business. I should like also to ask the Minister whether the financial arrangements are in all cases competitive with those of our major competitors in this field.
§ Lord Lucas of ChilworthMy Lords, I am grateful to the noble Lord, Lord Taylor of Gryfe, and I am glad to confirm that in most instances the influence of the finance markets, of which he has a great deal of knowledge, is an important factor in tendering for new ships. I have to confess that not always is the competition truly fair or our arrangements competitive.
§ Lord GreenwayMy Lords, is the noble Lord the Minister aware that possibly greater future competition for our shipbuilding industry will come from the People's Republic of China, whose shipyards have recently been set up—largely with British help?
§ Lord Lucas of ChilworthMy Lords, what the noble Lord, Lord Greenway, says may well be true, but as it has not yet happened one can only take note of developments. In truth, it is the Finns who have risen to third place in world shipbuilding capacity.